My Best Pick 2018

Ajay Relan

The founder of CX Partners is high on APL Apollo, which is building a brand in a commodity steel pipe business  

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Published 3 years ago on Jan 12, 2018 6 minutes Read
Vishal Koul

Never in my wildest dreams did I imagine that one day on these pages I will be recommending a steel pipe company as my investment pick for the year. And yet here I am doing so, fearlessly and shamelessly!

Eight years ago, driven by prejudice of what I considered a commodity play, I had turned down an opportunity to buy 50% stake in APL Apollo at less than Rs.100 a share. The stock, has since, turned out to be a multibagger and now trades upwards of Rs.1,900 a share. I turned down this opportunity because I made a cardinal error of judgement: I did not believe in the exceptional vision and entrepreneurial capability of a man called Sanjay Gupta. Today, I treat the same man with undiluted reverence and place him on par with the very best entrepreneurial stalwarts of our country. Gupta deserves probably even greater respect: unicorns run by other revered entrepreneurs are businesses which are more easily amenable to branding, and many of them occupy the services space such as IT and financial services, but Sanjay’s towering achievement is that he has created a very desirable consumer brand from a commodity-style manufacturing play.

In 2008, when I met Gupta he was barely 38 years old. Rustic, unpolished and with no management degree to buttress his resumé, he did not inspire much confidence — but how wrong was I in grossly underestimating him. Over the next few years, this unassuming young man would transform his fledgling company into a steel processing powerhouse where its products would command a premium in the market place and make APL Apollo a brand to reckon with. The manner in which he went about this transformative journey is the stuff that case studies at leading business schools are made of.

Radical transformation

The first thing that Gupta did was to hire the best management ta

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